Oh what a 'unicorn' this one is! A chase for a rare beast... you never seem to be able to catch!
Analysts with an accounting background everywhere will rubbish whatever database you build...because it isn't ...consistent...the 'c' word...
... So if only you could get a database, based on CONSISTENT accounting, then it would be a great database...but otherwise ...rubbish...
Now here's a piece of advice. Ignore this. Accounts are NEVER consistent. They aren't consistent across regions/countries...they are consistent across sectors...AND THEY AREN'T EVEN CONSISTENT FOR THE SAME COMPANY FOR MORE THAN A COUPLE OF YEARS AT A TIME!!!!!
If you have been plugging numbers into spreadsheets/databases on as many different companies and types of companies for as long as I have you will discover an unpleasant truth... accounting is just NEVER consistent. While there is the odd exception, the fact is even the same company changes its accounting ON AVERAGE every THREE years.
Here's what generally happens. Company A thinks a new biz might be interesting. So it starts the investment off as an 'associate' or an 'investment'. So it doesn't consolidate sales or much anything else...
....if the new biz is a flop, it never makes it into the 'group' P&L, Balance Sheet or Cashflow...
...if it works out, it progress from 'investment' to 'associate' and if it grows well enough is then consolidated into the group, and could end up BECOMING the group...
...Remember NOKIA did not start out as a mobile phone company, GM and GEs financing businesses were little investments which have ended up being bigger than the core businesses...
So let's just turn this completely around...
...never build a database EXPECTING your data to be consistent
....anticipate and expect changing accounts
... DO NOT throw the baby out with the bathwater...gather the data...gather as much as you can including keeping BOTH the original AND the RESTATED data to make sense of after...
...ORGANISE THE DATA to get what YOU want out of it, as and when it is relevant
... Prepare yourself for an imperfect world, consider consistent data to be a rare gem not a given...
THE ONLY WAY ALL YOUR ACCOUNTING DATA IS GOING TO BE CONSISTENT IS IF YOU EMPLOY A SINGLE ACCOUNTANT WITH ACCESS TO THE MANAGEMENT/INTERNAL ACCOUNTS OF EVERY SINGLE COMPANY IN THE DATABASE - AND THAT AIN'T GONNA HAPPEN!!!
These comments apply mainly to company account...but any data series that you want to measure...government stats, oil prices whatever...aren't that different.
Unicorn catching is for 'virgins'. With five kids between us, you and me are long passed that, so forget it!
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